Volkswagen Takes Steps to Settle Diesel Emissions Fraud Claims

Last year, Volkswagen admitted it had cheated on diesel emissions tests in Europe and the US. Now the auto maker has entered into a provisional agreement with the US government and auto owners' attorneys to pay up to $14.7 billion in a first step to settle claims worldwide.


In September 2015, the Environmental Protection Agency (EPA) accused Volkswagen of cheating on its emissions standards. It installed “defeat devices” in its cars to make them rate lower on diesel emissions tests than they actually performed on the roads. The EPA directed Volkswagen to recall nearly a half million Jettas, Beetles, Passats, Audis, and Golf SportsWagen vehicles. After European regulators were found to contain the same software, the recall jumped to 11 million vehicles. On September 23, 2015, CEO Martin Winterkorn accepted responsibility and resigned.

In a first step to resolving the scandal, Volkswagen has agreed to pay up to $14.7 billion to the EPA and private vehicle owners to resolve claims. Volkswagen will:

• Pay $2.7 billion to the EPA to compensate for the environmental impact of its cars' emissions;
  
• Invest $2 billion into cleaner-vehicle project research;
  
• Buy back up to 475,000 Volkswagen vehicles at their pre-scandal values;
  
• Pay cash compensation to Volkswagen owners ranging from $5,100 to $10,000;
  
• Pay half value to former owners who sold their vehicles in light of the scandal; and
  
• Offer to repair vehicles to meet emission standards instead, though doing so may reduce performance and gas mileage.
  

David M. Uhlmann, former chief of the Department of Justice's Environmental Crimes Section and current law professor at the University of Michigan, told the New York Times:

“It’s a remarkable deal for Volkswagen owners who were defrauded by the company. . . . It’s hard to see why consumers would want to take advantage of the fix and not the buyback option, unless they just love their cars. . . . For Volkswagen, it’s an extremely expensive settlement, far more than many analysts predicted.”

The settlement is far from final. Before any Volkswagen owners see their relief, the agreement will need to go before United States District Court Judge Charles R. Breyer in California and go through a period of public comment. Even after everything is resolved, the company could face criminal charges by the Department of Justice and the attorneys general in most states. Then it will still need to get approval for its recall changes from the EPA.

Affected Volkswagen owners aren't required to accept the settlement either. If they own cars not covered by the settlement, or believe the terms are unfair, they can still hire lemon law lawyers like The Liblang Law Firm, PC, in Birmingham, Michigan, to sue Volkswagen directly. The firm has helped over 15,000 vehicle owners get relief from auto manufacturers in individual suits and class actions. If you are a Volkswagen owner looking for compensation, contact The Liblang Law Firm, PC, today for a free consultation.